08 Feb 4 Reasons To Sell Your Domestic Solar PV Feed-in Tariff
4 Reasons To Sell Your Domestic Solar PV Feed-in Tariff
Our sister company, Solar Buyback Solutions, launched in 2015 to help domestic and commercial solar PV users release cash from their Feed-in Tariff and unlock their investment.
If you’ve installed solar PV on your property using an MCS approved Solar Photovoltaics installer, you would have been eligible to apply for the Government’s Feed-in Tariff Scheme and earn quarterly, index-linked payments for 20 or 25 years, depending on when your system was installed.
Since the launch of Solar Buyback Solutions, the UK’s first solar PV asset buy service (or “solar buy back” service), you now have the option to sell that Feed-in Tariff (FIT) for a cash lump sum. The panels stay on your roof, you continue to use as much of the free electricity you generate as possible, and we’ll even manage and pay for any maintenance your solar PV system needs for the rest of your FIT agreement period.
Why would I want to sell my solar PV Feed-in Tariff?
Why would you want to sell your domestic solar PV Feed-in Tariff? There could be any number of reasons you make the decision to sell, depending on your personal circumstances, but we’ve compiled a list of the most common reasons our customers decided to sell their FIT of cash.
1. FREE UP YOUR CASH
When you sign up to a 20 or 25 year agreement with your FIT provider, depending on when your system was installed, you agree to be paid a Feed-in Tariff in the form of quarterly, index-linked payments for the term of the agreement (20 or 25 years).
Since the launch of Solar Buyback, you no longer have to wait 20 years to see a healthy sum of money come in from your Feed-in Tariff.
Of course, if you’re happy with your personal cash flow circumstances, you could wait out the term of your FIT agreement and continue receiving relative dribs and drabs every three months.
The alternative is getting a cash lump sum transferred straight in to the bank account of your choice for you to spend as you wish!
Whether it’s a new car, the holiday you’ve always wanted to go on, or that special treat you had in mind, you’ll have the cash to do it when you sell your FIT.
2. PAY OFF YOUR DEBT
Having debt is expensive! Debts usually cost more in interest on the money you’ve borrowed than the interest you could earn on any savings. Basically, if you pay off your debt instead of saving your cash lump sum, you’re better off.
There are exceptions to this rule! In some circumstances, debt can be cheaper than savings, or paying it off could cost so much that there’s actually no point. Here are a couple of exceptions from Martin Lewis at MoneySavingExpert.com:
The penalty exception. If you’re locked into the debt, so that paying it off incurs a penalty, as with some loans or mortgages, then leave the cash sitting in a savings account until the penalty’s small enough that it doesn’t matter. More details on loan lock-ins are in the Money Savings Expert’s Cut the Cost of Existing Loans guide.
The interest-free / very cheap debt exception. Debts cost. Yet those who carefully and conscientiously manage their debts, so they’re constantly interest-free, should follow the opposite logic. If the interest rate on your debt is less than the amount your savings earn after tax then, providing you’re financially disciplined, you can profit from building up savings and keep the debts. In effect, you’re being paid on the money lent to you by the banks for nothing.
3. EARN TAX FREE CASH
Unlike the majority of earnings, Feed-in Tariff payments are tax free, provided you’re generating electricity mainly for use in your own home. This means when you sell your domestic FIT for a cash lump sum, you won’t have to pay any tax on it at all!
The official rule is that ITTOIA/S782A provides an exemption from income tax for an individual’s income from the sale of electricity generated by a micro generation system where:
- the system is installed at or near domestic premises occupied by the individual, and
- the individual intends that the amount of electricity generated by the micro generation system will not significantly exceed the amount of electricity consumed in those premises.
If your FIT’s not registered to a property for your personal, domestic electricity production, you’ll have to pay tax. If your FIT is owned by a registered company, partnership or sole trader business, you will have to declare your FIT earnings (including if you sell your FIT for a cash lump sum) as “other income”. This will be included in your taxable profits, and you’ll have to pay income tax or corporation tax on this. Landlords of let properties also have to include income from FIT as taxable income.
We’re not tax experts, so don’t take our word as legal or financial advice, and make sure you seek a professional opinion on this topic. HMRC has a dedicated manual on Feed-in tariff and tax on their website.
4. GET MORE WHEN SELLING YOUR HOUSE
If you have solar PV installed, and you’re thinking of selling your property, you should consider selling your Feed-in Tariff first.
Although having PV installed and receiving FIT payments will add some value to your property when you’re selling, it will never add the full value of the FIT (the total FIT oncome over the lifetime of your FIT agreement). This is because it’s not instant cash – the new owners would have to wait up to 20 years to see that money, so they’re usually not willing to pay you for it now.
If you sell your FIT using a solar buy back service before selling your property, you’ll benefit from the cash lump sum you’ll earn, as well as the money you get for selling your property.
The beauty of this is that you get a cash lump sum, but the value of your property will still be higher than that of a similar property without solar PV installed, because of the additional benefits to the new owner
Energy performance. Solar panels can add value to your property by raising the house’s EPC (Energy Performance Certificate) grade. Every house that’s bought or sold in the UK needs to have a valid EPC. After being assessed, your property will be awarded a grade from A (highest) to G (lowest). EPC ratings can have a significant effect on house values. Solar panels have been known to raise a house’s EPC rating by at least 2 grades; this is reflected in the property’s value.
Electricity savings. The lower electricity bills that solar PV brings are a great draw to buyers due to the constantly rising cost of traditional energy. Recent studies have shown that up to a third of UK buyers would be willing to pay more for a house with solar PV installed, because of the benefit of lower energy bills.
When you sell your FIT to Solar Buyback Solutions, all maintenance is covered for the duration of the FIT, so you can guarantee that the new owners will benefit for at least as long as the FIT term. Once the FIT term comes to an end, the property owner will have the choice to keep the panels on the property, and ownership will be transferred to them, or they can have the panels removed, at no cost.
HOW MUCH IS YOUR FIT WORTH?
Have you valued your Solar PV Feed-in Tariff to find out how much you could make by selling it? Get an instant, online quote today with the Solar Buyback calculator.
The Solar Buyback calculator is free, quick and easy to use – enter your PV system details and current generation meter reading, and you’ll get a price offer immediately. The price offer is subject to a technical survey, but Solar Buyback Solutions pride themselves on giving you the most accurate quote possible from the outset.
Remember, if you decide to sell your FIT, the PV system stays on your property, you keep using as much of the free electricity as possible, Solar Buyback Solutions manage any system maintenance needed for the duration of the FIT, and you get a cash lump sum, transferred to a bank account of your choice!
Find out how much your FIT is worth today or contact Solar Buyback Solutions with any questions you have, their team is always happy to help. Call 0800 304 7545 or email Hello@solarbuybacksolutions.com
Disclaimer: Solar Buyback Solutions and Just Energy Solutions are not registered investment advisers, brokers/dealers, financial analysts, financial banks, securities brokers or financial planners. The information on this site is provided for information purposes only. The information is not intended to be and does not constitute financial advice or any other advice, is in general nature and not specific to you. Before using Solar Buyback Solution and Just Energy Solutions’ information to make an investment decision, you should seek the advice of a qualified and registered securities professional and undertake your own due diligence. None of the information on our site is intended as investment advice, as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any security, company, or fund. Solar Buyback Solutions and Just Energy Solutions are not responsible for any investment decision made by you. You are responsible for your own investment research and investment decision.